Make “benefit Agreements” With Your Children to Teach Them How to Understand Money
The sooner we learn about money , the more time we will have to develop strong financial habits. The manual is a good opportunity to teach children how money works. In Penny Hoarder, one father explains how he uses a “premium contract” to teach his children to negotiate wages.
Not every parent likes to give a manual, but it can be a useful tool for learning about money . In an interview, Dad Bob Helbig describes his system of using allowance contracts to teach his kids how to negotiate, work for an employer, save for the future, and even donate money to charity. This is actually the same idea as just giving them a manual, but much more detailed and implemented in terms of personal finances:
“All requirements must be met to receive the $ 5 a week benefit, which must be paid no later than the evening of the last Sunday of each month,” the contracts say. “Failure to do all of this may result in said benefit withholding.”
From here, contracts set out the specifics of what each child is responsible for around the house, how their benefits work, and who gets stuck in the worst chores. They also encourage good money-saving habits with a creative, 401 (k) -like matching system.
Helbig says he sets aside a portion of the child’s savings every month, just like an employer might calculate your 401 (k). He also encourages his children to negotiate “cost-of-living adjustments” and uses this as an opportunity to teach them how to negotiate. This goes without saying, but obviously your relationship with children is very different from that of an employer and employee, so this idea has some limitations. However, this is the whole point – to teach children about how money works in the real world. To find out more about the Helbig system, go to the message below.
The Easy Way This Dad Teaches His Children About Money and Negotiation | Penny Drive via Reddit